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  • Today's business and finance round up 31st October 2022

Today's business and finance round up 31st October 2022

After Musk takeover, what next for Twitter?

October 31, 2022

31st October 2022

Bite-sized business news from the UK and beyond

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Today's stories

  • After Musk takeover, what next for Twitter?

  • Why a strong US dollar is so problematic for the wider world

TECHAfter Musk takeover, what next for Twitter?

 

What happened?After what felt like years (but was really six months), Elon Musk, finally and officially completed the $44bn takeover of Twitter on Friday. Musk’s first full day owning Twitter was eventfulThe world’s richest man immediately fired Twitter’s policy chief, CFO and CEO. It’s been reported that Musk will act as the interim CEO, adding to his current roles as the CEO of both electric car maker Tesla and space exploration firm SpaceX.What happens next?Musk says he wants to “help humanity” by trying to turn Twitter into a “common digital town square.”He’s previously described himself as a “free speech absolutist” who’s railed against the site’s content moderation policies, like the ones that got former US President Trump banned from Twitter.But he’s since backtracked and said he would form a “content moderation council with widely diverse viewpoints” and won’t reinstate any accounts before the council meets. Financially he’s said before that he wants to 5x Twitter’s revenue by 2028, supercharge the subscriptions business, and turn Twitter into a super app called “X.”Yes, but: As lofty as his long-term vision is Musk faces a series of hurdles, like backlash from Twitter employees, nervous advertisers and tightening Big Tech regulations (especially in the EU). He’s also buying a social media company at a time when social media companies are facing lower advertising budgets, and Twitter specifically is struggling to retain users.

Other stories to keep you in the loop

  • Royal Mail workers union calls off planned strikes after legal challenge

  • Octopus Energy seals bid to take over 1.5m Bulb customers

  • West urges Russia to reverse Ukraine grain deal suspension

  • Revolut CEO renounces Russian citizenship

  • New National Lottery operator Allwyn in £100m talks to buy Camelot UK

  • Aldi increases pay for its staff for third time in a year

GLOBAL ECONOMYWhy a strong US dollar is so problematic for the wider world    

What happened?This year the US dollar has strengthened against several major currencies as interest rate hikes and economic misjudgements leave investors flocking to the stable currency. How did we get here?The US central bank, the Federal Reserve, has been quicker and more aggressive at raising interest rates to fight inflation compared to its international peers. The Fed’s decision has therefore made US dollars more attractive to investors and increased their value.The pound has been on a downward trajectory against the dollar since the Brexit vote in 2016. But then took a marked step down in recent weeks after the disastrous mini budget made investors wary of the UK’s economic credibility.  But the pound is not the only currency to have shed value recently: The South Korean won, Japanese yen and euro have all reached multi-decade lows this year.Much of global trade and transactions is priced in dollarsThat’s bad for countries dependent on dollar-denominated imports (making goods more expensive) and loans (leaving foreign borrowers paying more back in repayments). To limit the damage, central banks have tried to prop up the value of their own currencies by selling off dollars to buy more of their own currency. India, Japan, South Korea, Taiwan, the Philippines, Vietnam, Malaysia and Thailand have all done this in recent months. The goal of these buybacks is to stop currencies from sliding, but it’s only enough to slow down their decline rather than stop it.Bottom line: This isn’t great for the US in the long term, as central banks have also taken to raising cash by selling off US government bonds (which hinders the demand for US debt) and some countries, like Egypt, are developing new tools to break dependence on the dollar altogether.

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